Today I have the pleasure of sitting down with Eric Jorgensson who is the author of the book of Elon. And I think it’s super great for more people to basically understand how Elon operates. And so I wanted to do this conversation. Let’s start with why is Elon able to out compete everyone. » This question is exactly why I wrote the book because I think he is absolutely singular and I think so much of what he does is replicatable. Uh the answer in a few sentences is he’s on an unbelievably grand and glorious purposeful mission that unites people and inspires them to work harder than they ever have been before. He has a knack for working on the right thing at the right time, which is right now with incredible intensity and addressing it in not just an incremental improvement, but a step function improvement. And a lot of people talk about his first principles thinking or his speed of execution, but they miss that those ideas all multiply each other’s effectiveness. He’s 10,000 times more effective than other people. Not because he’s 10,000 times smarter, but because each of those improvements don’t just add, they multiply. And that’s why he’s an outlier among outliers. like there is nobody alive who is operating at the level that he’s operating even though there’s a lot of really smart people building unprecedented things and that question like what is he doing differently is you know Brian Armstrong has talked about it Mark Andre has talked about it like the central question like can everything just be better and more efficient and more effective and what if we were all capable of 10 times 100 a thousand times more than we’re doing right now I think that’s what Elon shows us and what I hope people get out of this book. » I have this interesting theory. He’s got like different stages of who he’s been over the last 30 years since he started Zip 2 in like 1996 where initially he was just grinding on software companies. And I think at that point he was just mostly working on software and sales. » But then there was this stage between 2001ish and 2010 where he just didn’t want to be CEO. but he he was forced into the position of being CEO and he would go on interviews basically talking about how he really didn’t want to be CEO and then somewhere around 2011 12 13 he just stops talking about that I think most people just haven’t studied him and seen that transition but I think that there was like different evolutions of him and I’d be curious to know what kind of made that switch he is at core an engineer and a product guy right and Zip 2 and and PayPal both uh were such productdriven companies that sort of an engineering approach could make the company successful and they were both relatively uh short duration companies like they sold in the first you know I think it was five or six years in the case of Zip 2 and like two or three years in the case of PayPal but that was a lot of life that lived very quickly and so that’s just a fundamentally different thing than Tesla and SpaceX where you have to create alignment and vision and product iterations over like a decade plus and he has this great line where he’s like I realized you couldn’t be fully in control of the product unless you were also in control of the company. And you do see that in uh you know Steve Jobs and Wazak where like eventually Jobs became CEO even though or became sort of sole controller of the company even though uh he and W started it as collaborators because he’s like I I need sole visionary control of this product. And I think Elon is kind of the same way. He says he made a he calls it a moral error early in Tesla where he was like I was trying to have my cake and eat it too. I wanted to sort of control the company without running the company and that was that kind of like 2002 to 2008 era uh where Tesla was just off to a really messy start where he was providing the funding. He was chairman of the board. U Martin Everhard was a CEO and but he had like was sending him opinions and product ideas and like demands and all this stuff all the time and it was just chaotic. And eventually when Tesla was like on the verge of death in in 2008, Elon was like, I » I know there was like an inflection point where basically Martin knew the cost of a Roadster and Elon went to like the engineers that were on the line or, you know, were working on it and basically asked for a line item, you know, breakdown of exactly what the costs were. And I think Martin Everard said something on the order of the roadster cost like 120,000 to make and the actual number was closer to 150. And Elon knew the number and Elon knew that Martin knew the number » and he thought that basically there was like a permanent break in trust. » Yeah. And and I think that was after a period of realizing that they didn’t actually know the number. They were like what does this thing that we are selling cost? And like Martin never didn’t know. Um he’s like all right. They both went and tried to figure it out. And yeah, it it was that was a very ugly period. Um that was at the end of a whole bunch of kind of disagreements and challenges that they’d been through. Um but it did push Elon into that position of like I have to be CEO. I don’t want to be. It comes with a lot of chores. It comes with a lot of responsibilities. You’re at the nexus of everything, but if I want this company to be successful, you know, I have to fully internalize and take responsibility for it. And that’s what he did, even though he was also in the same position at at SpaceX. And the fact that both of these companies are improbable, iconic, and that he funded and led them both in parallel is like I I wrote in the introduction of the book, it’s like running a two-minute mile twice at the same time. Um, it is just so improbable and so it is such a higher degree of difficulty than most people can conceive of. And the fact that it worked is still unbelievable. Abology uh his blurb on the book is like the better you are, the better you realize how good Elon is. And that is like which is why Mark Andre and Brian Armstrong and you and me and so many people are like how does he do it? What is he doing differently? » Do you think that he underestimated or misestimated the likelihood of success with Tesla and SpaceX? I know he’s been quoted as saying that he thought that each of them had a roughly 10% chance of success, whatever success is, but then because both of them work, the probability of that one like in a 100 outcome actually occurring is, you know, asmmptoically small. » Yeah. I I think, you know, we’re in a good uh a very lucky universe in the multiverse maybe of like where both of them happen to work like the timeline is is being good to us. Has there been any other examples where he overestimated likelihood of failure? » He was probably being kind to himself, I think, in retrospect there of like being realistic that these companies have low odds of success. I mean, nobody had had started a car a successful car startup in a 100 years in America. Um, and space launch companies was like an unprecedented category. So, like 10% probably was overestimating the odds of success, especially if you stack them on top of each other. Um and even you know the greatest venture capitalists in the world like knew Elon saw him be successful with Zip 2 and PayPal and then he came around and pitched this and they were like no like Mike Morris and Sequoia like made a bunch of money with him in PayPal and Elon comes around pitching Tesla and he’s like sorry bro like not going to happen. Um and you know luckily Elon was in a position to fund these companies until they were um still not quite undeniable but that he was able to get them to the point where it was clear that additional resources would create you know subsequent breakthroughs and make them successful. Um I mean your question he’s he’s off on estimates all the time like overestimating success and underestimating success and compressing timelines. Like I think one of the most interesting things that I I kind of see you probably do the same thing is like creating short timelines that he says have a 50% probability of being made. Um and that’s such an interesting reframe from like we want to prevent any chance of failure and choose timelines that we know are successful to I want a short timeline that I think has a 50% chance of being successful. And you know, we’re going to miss a lot of the time, but we’re going to achieve a lot more than we would if we gave ourselves a timeline that was very comfortable to beat. » It’s also interesting he actually frames it that way because he’s just by default saying that most of the time, like a lot of the timelines, we’re just not going to achieve uh in the first place. But I also know it’s just this forcing function to make everyone move faster. the purposeful 50% uh like timeline thing is actually a really good example of a meta that goes across his whole operating philosophy which is encouraging or allowing small failures in order to make the whole like more robust. He he’s really focused on increasing the learning rate of his companies and moving ever closer towards this more perfect product. And the the sort of quote that encapsulates this is failure is essentially irrelevant unless it’s catastrophic. and having a high iteration rate and giving young engineers like huge responsibility and pushing program timelines and pushing iteration speed. All of these things sort of create these small failures that make the end product better because those failures are instructive. It shows you you know where something breaks. He calls it building the box in the sort of rocket program, right? So you want to push each variable to failure so that you know where it fails. so that you know where the outer limit of performance of the material or the system is and then you just want to be just like a scooch inside of it to cover for some variability. Um, but if you’re in the very comfortable center of the box, you have no idea what your actual true range of performance is. And in the case of something like Starship, you’re giving up huge amounts of of economics. Um, if you’re overengineering for redundancy and safety to a degree that you don’t even understand because you’ve never pushed the system to the limit. He also had a very interesting philosophy at the start of SpaceX where he would think about like future revenue as you know per day and I think he estimated at roughly like $10 million per day every single day that they delayed of lost future revenue. You know he famously had this situation where at one point he like took a you know flew a little part on a private jet to Quad uh it cost like $100,000 or something because he could basically make a hundred times more money in the future you know 15 years later. No, he he’s very where he’s frugal and where he spends lavishly is really interesting and it only makes sense through as you point out the lens of the time, right? Like the opportunity cost of time is absolutely massive. It’s the fundamental currency of everything that we’re doing. It’s how we live our lives. It’s how entrepreneurs like drive their companies. But people tend to be sort of pennywise and pound foolish about focusing on the currency and wasting time in order to save small amounts of money. Whereas he understands like if we can accelerate the timeline towards that, you know, $10 million a day of revenue or that future market cap or that next inflection point in the valuation of the company, if we can achieve that a week sooner, a month sooner, a year sooner, uh we are going to massively collapse and increase the ROI of of everything that everybody’s doing all the way along. And so in that story of like flying a part to Quage, it was probably the fact that he’s got like 10 engineers and, you know, $30 million worth of rockets that’s waiting on this one part. And so, of course, $100,000 to get the part there, you know, 24 hours sooner or a week sooner unlocks the progress of $50 million worth of capital and equipment and buys you that future, you know, revenue and valuation, which is just, you know, that that is the driving force, I think, of some of this maniacal urgency that he talks. Maniacal urgency is our operating principle and nobody moves at the pace that he does. And I think it starts with that kind of understanding of opportunity costs. » Do you want to touch on basically how he lives his life? Uh I remember seeing a picture of a bunch of Diet Coke cans that are like uncaffeinated Diet Coke cans and just like a gun on his bedside table and it’s just like that’s and you know in the Chris Williamson episode um you were talking about eight sleep and of course he apparently does use an eight when he sleeps. I don’t know if he has one on his private jet which he spends like a third of his life on. » Yeah. » How does he actually operate his dayto-day life? like what is he what is he doing when he wakes up in the morning? » Yeah, I mean my my caveat is I’ve not gotten the opportunity to like follow or shadow him or anything. So, this is all sort of trying to reconstruct from like what he said publicly, which is the main source of, you know, my uh inputs for the book and everything like that. Um, but I do think it’s interesting that he does none of the sort of traditionally like quote unquote productivity stuff. Like the most productive man on earth does not follow any of the productivity rules or gurus. » He wakes up and goes to war. » He wakes up and goes to war. He like wakes up, picks up his phone, looks for emergencies. There’s usually an emergency and he tackles the emergencies. Um the answer probably most directly is he goes wherever the problem is. He goes physically to where the problem is. Um which is why, you know, his private jet uh sort of view for the year of all these trips is just like bouncing all over the world all the time. I’d be really curious to compare his calendar or schedule or or kind of a retrospective on how he spends his time compared to other just say Fortune 500 CEOs or tech CEOs who it seems to me tend to run a pretty regimented schedule of like all right I meet with these people this week these people this week um you know we got a board meeting we got this we got that and it seems that Elon at one point like fired his his assistant did the scheduling and was just like I just I need to respond to wherever the fire is. I need to go wherever the most important thing is. And maybe many CEOs can’t operate that way because they don’t have the infrastructure in place. I mean, he’s surrounded by experts and professionals and incredible managers and leaders and engineers who are making sure that everything else stays on the rails. Um, but the the founder or the CEO or this kind of this person, the guy, whoever that is in the company or girl has a unique power to sort of bestow like energy and attention on the bottleneck. And so to just parachute in and use that charisma, that force of will, that attention, that like eye of Sauron to just zoom in on wherever the bottleneck is, wherever the problem is, and just push that solution through, push that solution through and break through anything um that’s holding them back from solving it. » Yeah. I think the founders have a unique ability or like they’re allowed to make decisions that other hired gun CEOs are just not allowed to make because they’ve seen they’ve basically grown, you know, raised the baby. Brian Armstrong talked about that I think in his your interview with him. He talked about like being totally unafraid to go back to zero because he knew he built this whole house brick by brick. And he’s like, you know, that gives me this incredible not just moral authority, but personal confidence to, you know, renovate the company at a moment’s notice. » I would like to spend some time on basically how Elon starts companies. He’s got this famous thing where he will basically try to get a mockup of whatever the thing is that he is wanting to do as quickly as possible and then he wants to bring that into the real world so that he can actually show something again as quickly as possible. I was listening to the Walter Isaacson biography this morning and hearing him basically, you know, when he was thinking about Boring Company, he just calls up Steve J Davis and he’s like, “How is this currently done?” And he’s like, “Oh, you can just buy these things, you know, these boring machines for $5 million each.” Um he’s like, “Cool, buy two.” And they go, you know, we’re going to dig a hole in this parking lot. And some guy comes back with it’s going to be 2 weeks. And he’s like, “No, we’re going to have this done by like Sunday,” which is 2 days from now. Um and then they have this big unveiling literally 2 days later. And it’s like we’re creating a new company. A lot of people probably think that he moves incredibly fast on companies, but if you actually look at like how long these things take to incubate, it’s, you know, it’s decade on and Boring Company, it’s a decade on a Neurolink, but he also has incredibly fast like startup timelines. How does he kind of like do those two things? » Yeah, the demo is a really good thing and we should come back to that. But even before that, I think sort of what you’re hinting at is the feasibility study where and he did this for SpaceX even before PayPal exited. He was just kind of interested in this problem of space launch costs. And he ran over a series of Saturdays at his house. He just gathered up engineers who’d worked on all the major launch vehicles over the last couple decades. and he’s like, “I have a hunch that we could make a massive improvement here, that this could be, you know, 10x, 100x better. Um, let’s just push on it. Let’s like whiteboard and and do some math and just see is there something here that we can push to that a fundamentally new kind of design is possible.” And I I don’t know if that went, you know, 10 weeks or 50 weeks, but right around the time that they were sort of coming to the conclusion that yes, a massive breakthrough is possible here, um, PayPal sold. And so he was like, aha, okay, like let’s let’s actually turn this into a company now and get to work. And I think a lot of people sort of have the perception that you start the company to run the experiment. And that story is a good example of like just take a while to do some some feasibility and some studies. And some of the best investments I’ve made have come from, you know, two years of conversation with the founder as they sort of map the maze and met the people and figure out the dependencies and then they say like, “Okay, I’ve got the game plan ready. Like, here we go. We’re going to flip the switch.” That’s not always how it works, but um some of the ones that have been able to move fastest after they founded and brought in the capital and then, you know, delivered the highest ROI because they did as so much research um and understanding ahead of time before they actually got started. And then SpaceX, of course, didn’t leap straight to, all right, great. we’re going to build, you know, Starship or even Falcon 9. They built like Grasshopper. They built one engine um and tried to demonstrate that reusability with a small hop um with a relatively small amount of money in the scheme of things. And you know, that was it wasn’t an all-consuming thing for Elon at that time. He was just kind of like, I have a hunch that we can move this thing forward. So, I’m going to hire, you know, Tom Mueller and like these other incredible rocket engineers and just fund them to run these experiments and try to prove that this is possible with a small demo. But over and over and over again across, you know, both Tesla and SpaceX and even before that in in PayPal and Zip 2, he has a sense of the kind of a a theat a theatrical demo or even just like a a basic kind of way to gro it that you just can’t get from a slide deck or a memo that really catalyzes people. Um, and it’s it’s a really powerful thing that I think gives Elon um, advantage after advantage and still seems pretty underused by a lot of founders, a lot of CEOs. You know, I see a lot of slide decks and not that many demos like in the world. » Yeah. I think Brian Armstrong even talked about this during the interview that we did where he basically said if you want people to go like join a company or something or start a company, it’s much easier to just get them to agree to a dinner than to like say, “Hey, let’s go start a startup.” Cuz sometimes I think this I was listening to how opening I was started too recently and they just got a bunch of the best people together on some like I don’t know camping trip or something and just had them all talking and then they just enjoyed it. » They were like, “Oh, this is kind of cool.” people kind of vastly underestimate how powerful having like a visual cue of like seriousness is for I don’t know like evangelizing action. » And here’s the thing, even shitty demos work. Like there’s a story in the book of him giving Larry and Sergey a demo of the early Roadster with like the um the very early like handmade kind of electric motors and basic batteries. And the car only went like 10 miles an hour or 50 m hour or something and it was like a terrible demo. But they still agreed to invest cuz they were like, “You’ve covered a lot of ground. You’re not telling me what you would do. You’re showing me the progress you’ve already made.” And that is just a world of difference. » Yeah. I think at one point it almost basically saved Tesla because they were going to run out of cash. Daimler obviously basically made this like $50 million investment I believe in in Tesla. And it was over the fact that he had just built a smart car using some I think he like imported a little smart car gasoline from Mexico and then retrofitted it with EV batteries and then the Daimler executives show up and they’re in the board meeting. He’s very they’re very bored. Um and then he’s like, “All right, do you want to just go try it?” And they were like, “What do you mean?” And they’re like, “We have a test in the parking lot.” And they just zipped it around and then made the investment. » Yeah. I think and I think they built that like while the Daimler exacts were on the flight over or something. It was on some insanely short timeline. » It’s like a few weeks like maybe it was even shorter than that. » It might have been like days like or some number some dozens of hours where they were like this is not compelling what we have to show. So like this is our move is like we’ve got to go straight to » 0 to 60 in 4 seconds you know on this smart little smart car. » But that that that’s so much of what gave Tesla traction in the early days I think is people just had never felt like silent and immediate acceleration from torque like that. like you and it gave so many people the sense of like oh [ __ ] like electric cars are not these like kind of wimpy like things like this can be cool and performant and like maybe the electric car era has some like has some sauce like this is going to be awesome not terrible that helped you know car people and engineers and nerds like get excited about the prospect of actually building one of these things. » There’s this idea action produces information. There’s also something slightly different which is just action produces action where if you take the first step normally it’s easier to take much more you know more steps and so I feel like when he has a situation where he wants you know when he comes into the environment like a factory or something and there’s not enough action happening he gets worried. I think a lot of people see this as him being an [ __ ] calling in people at midnight or 2 a.m. But I almost feel like this is part of the game and people don’t understand how powerful this is. » Yeah. more than worried, I’d say. Like there’s the stories of him being like blowing up basically when he uh I think he went to Star Base or something and there was like five people working at the rocket and he went off and he was like, “It is [ __ ] up that there’s only five people here. I’ve got, you know, 300 people on payroll. This place should look like a beehive, I think, 247 is like actually his like the way he talked about it, at least in that moment. and he’s like, “I’m setting up a camera and I’m going to I want it to look like a time-lapse beehive all the time.” Um, and you know, reasonable people can say like, “Well, you’re just like, that’s an [ __ ] thing to do. What matters is XYZ. Like, you’re you could be more elegant and you know, why do you need people to be working at 2 a.m.?” And I think that that sort of misses the point that like the cultures that Elon builds are highintensity, maximum effort at all times cultures. and the surges at many times have saved the company like the Tesla Model 3 production surge or you know the the Starship surge but there’s also ones where he’s like not you know in the Isaxen book in particular Isixen seems to judge harshly some of the surges that he called which is like there’s no point in stacking the Starship um on the booster at that particular time and I think Elon would say yes but it’s a very powerful demonstration to have this thing that looks like a skyscraper and have people be able to take photos of it and have it look closer to ready because it manifests and catalyzes us to to get that work done. And so, you know, I kind of say I I would trust Isacson less than Musk to decide which surges are going to do the best for his company. » It’s kind of funny when you have some like third party that hasn’t ever built anything like that come in and be like, “Here’s what I think makes sense.” And it’s like, but you have no track record to prove that it like your thing works. You’re just talking. » Yeah. It’s and it’s a reasonable reasonable people criticize Elon for being unreasonable. And I think one of Elon’s superpowers is being unreasonable. I mean that that uh quote all progress depends on the unreasonable man. Like the cultures that he builds by driving these surges and by insisting on this intensity and by ensuring that people are working at max effort all the time. It selects for the people who want to be in that kind of environment. And it’s what drives, you know, it’s very hard to just switch gears from like, oh, I normally drive, you know, the speed limit all the time and I never push my car, but all of a sudden I’m max for stopping and I’m going to be, you know, able to drive a Formula 1 course at top speed. No, like the people who are pushing the limit constantly are the ones who are able to push the limit most effectively. And so I think that’s the cultural value that he tries to instill is maniacal urgency at all times, maximum effort, and you never know kind of which things are going to break through and matter in retrospect. If you attack a bottleneck before it becomes the bottleneck, then you have saved time. If it was invisible, you might not necessarily know, but if you’re pushing that urgency all the time, you’re preventing future bottlenecks from arising. that again is going to accelerate the timeline and draw up the progress that the overall business is creating. when we were talking about basically like this different evolution of Elon from like 1996 to later at some point around 2012 to 2013 he stops complaining about being CEO and he just learns that you know that is a thing that he has to do and then there’s also this funny thing recently where he’ll be you know live streaming playing video games for 7 hours or something and people you know six days a week people are like how the [ __ ] is he doing this and also running these six different companies like they’re seeing the rockets go up and he’s just playing you know Diablo um it’s very confusing. And the the conclusion that I’ve come to is that he’s effectively done something similar to Mr. Beast. Mr. Beast would have someone shadow him for a year, try to clone him, basically impress the way of his thinking, the way he makes decisions, all this stuff into this other person, and then he could just have them go and basically be like a mini Mr. Beast clone. And I think Elon’s kind of done the same thing where he’s effectively got like 20 maybe 25 people uh across his organizations that all think and act in the Elon way and then he can just have them execute his will autonomously without having to be there all the time. Yeah, I learned that actually in specifically from your interview with Shawn Magcguire, which is awesome. And he goes right into that off the top talking about how » like we give Elon the guy a lot of credit for the things that are actually dozens of people or in some cases like » Elon’s basically » dozens of people. Yeah. and he’s um you know he’s just in many ways he’s a symbol um now he’s he’s almost like a Batman for you know founders and entrepreneurs that we are ascribing things to him that are almost superhuman in ways that are like there’s productive ways to do that and unproductive ways to do it. Um but I think the the cloning Mr. the way Mr. talks about clon is is so perfect and actually should be the gold standard for onboarding and it’s so funny that for all the books and professionals in onboarding and whatever nobody has done the like simple street smart obviously best thing that he that Mr. does, which is just like once you’re hired, if you’re smart enough to be in this role, you’re just going to sit next to me for 24 hours a day, move in with me, follow me around, shadow me, and I I’m going to download my brain into you, and you’re going to absorb as much as you possibly can. And so, you can think like me, you can talk like me, you can you should absorb all of my mental models and execute, as you said, execute my will autonomously in exactly the same way as I would if I were there. And I Elon’s been at that a way longer time than than Jimmy, right? He’s 20 years into building these teams and collecting some of the best engineers in the world and collaborating with them to figure out like the algorithm as a a program, the maniacal urgency, the first principles thinking like and there are so many stories of people that are really really high quality like Elon clones who are steeped in these things. um who like Martin Kosa like tackling Starlink, right? Starlink was, you know, 10x too expensive and 10x under production limits. And so they fired the entire Starlink team. Martin Kosa flew up there with a group of his people. They war roommed. They first principled. They they algorithmed and they had covered two orders of magnitude gap in like I think it was like 10 to 12 months or something like that. this program that had been stalled for years under the expertise of actual satellite engineers who’d been working in this industry their whole lives from a bunch of Rocky guys who knew Elon’s sort of methods and mindset but had never worked in this particular industry before and I that is the perfect story to me of like why this book matters why these ideas matter why you want to download all the Elon methods and mindset into your brain because you know two order of magnitude improvements are possible all over the place we are surrounded by inefficiency and opportunity that’s just waiting for somebody to really apply themselves and break through the sort of analogy stasis hellscape that we live in in almost all ways almost all the time. » What do you think makes the right person? So of those like 20 people that Elon has built these relationships with every single person in an Elon organization the way I think about it is like as soon as you join you are basically doing a tour of duty. Um, and you have like a you will get shot in the head at this date and then like the clock is constantly changing based on your actions. Um, like the end result is you’re gone. Um, and that’s just everyone. But, you know, some people last longer than others. And some of the people like JB’s Travel uh lasted you know 16 17 years very very long time. And he was like » really strong lieutenant with Elon and then there’s other people that last like a month and are are gone basically like that. What do you what do you think makes someone really succeed under his leadership? » I think there’s probably lots of different ways to win as long as you abide by the non-negotiable minimums, right? So, I think it helps if you’re an amazing engineer. I think you have to be a little um the bias to action and the the urgency have to be there. Um there’s been times when he sort of insists on sacrifice. It seems like um » it tour of duty is a good thing. Like nobody wants to live their whole lives probably working this way. It it does seem to interfere with family life and raising kids and you know um » you’re basically putting off all those other things and saying I’m just going to be focused on this for however long that is. » Yeah. And and like I honor, respect and appreciate that people do that. Like thank God that that exists and thank God that there are people who are willing to go do it and for people to sort of pass moral judgment on others who want to work harder than them. I say what and why? Um, but to go do that tour of duty and just give yourself over to an organization and say like just ring me out. Just get as much as you can out of me while I’m here because I believe in this mission and I want to be pushed to my limit and I want to be I want to give everything that I can to you know achieve this new milestone of humanoid robotics or autonomous driving or you know getting us to Mars, getting Starship going, building data centers in space, whatever it is. Um, and it’s really hard to have that sort of culture and that level of dedication if you’re running a real estate brokerage, right? Like, um, so in this way, I think the the mission and the purposeness of the purposefulness of what he does is integral to the cultures that he builds and the people that he attracts and the amount of progress that gets made. » How do you think he goes about basically creating missions in his own mind? I’ve heard people say that he like doesn’t read people extremely well. Um, but he’s also just incredibly good at figuring out here’s like a grand vision for people to believe in. And a lot of the world will be like, uh, doesn’t really matter. I don’t really care. But then there there’s like some subsection of the world that just absolutely loves it and is like Elon’s going to go, you know, make life multilanetary and so we should all join that. What like makes a great mission from his perspective? I mean, I I think, funnily enough, a lot of this comes from sci-fi. Like, it’s almost it’s almost childish. Like, I think a lot of like adults would say like, “Oh, going to Mars is that’s not our biggest problem. We need to solve gerrymandering or something.” And he’s like, “No, no, let’s like let’s zoom out.” Um but that that broad perspective comes from I think thinking these grand time scales and reading foundation and realizing that you know these existential risks of an asteroid hitting earth seem fanciful and farcical and unreal until all of a sudden they’re real and he just has a very objective sort of like math-based broad view where he’s like there’s probably at some point going to be another world war just statistically speaking there’s probably going to be an asteroid that hits earth statistically speaking there has been many extinction events through the course of geological history like we do not want to be one of them. So what can we do to prevent that? And it’s a little bit um because it’s so far outside like the current social zeitgeist I think it it’s like it does very much sound like a 15-year-old who’s really into sci-fi who has a little bit of asberers who’s like guys why are we not all really paying attention to the fact that like we might all get smoked off the earth but taking it really seriously and doing it at a high level. When he lays it out it’s like kind of hard to argue with. Like one of the things I like to do with people who are are Elon haters or doubters is like I I give them the book or I flip to any random page and I’m just like just circle any sentence that you disagree with. Like I know that you don’t think you like him. I know that you think you disagree, but this is a book full of his words. So show me which ideas you disagree with. Like do you not think we should be multilanetary? Do you not think these existential risks exist? Do you not think that, you know, we’re capable of operating with with a higher level of urgency? Um, it’s actually hard to disagree with a lot of the things when you just see them down in black and white. Um, but because they’re such new and different thoughts than most people encounter in their daily life, it does sort of like people kind of automatically sort it into the crazy bucket instead of really like taking a second to absorb it and be like that actually makes a lot of sense. » I think the other thing too is like our brains are hardwired to delete as much as possible. And so if you come across information and like the way that he thinks is so foreign to the way that everyone else thinks that » if you come across his way of thinking and you’re not trying to adopt it, » it’s more useful to just forget about it and delete that it even existed in the first place than to try to like study it and learn from it and absorb it. » Yeah. And so the bucket that I would sort of put this in for maybe the average person is I think most people » we we all need meaning. We all want meaning and I think that there’s this sort of slow motion crisis of meaning happening between like fear of AI taking our jobs uh lowered trust in institutions uh more confusion around like you know declining religiosity in in folks um and so if the answer to like how do I live a meaningful life like Elon is actually puts forth a really compelling answer to that he has a worldview that is like we are trying to figure out more about the universe we’re trying to answer more questions like on a scientific basis and understand why we’re here and what opportunities are before us. We’re trying to preserve the only consciousness that we’re aware of. We’re trying to preserve all of life as we know it. We’re the only conscious things on this planet. It’s our responsibility to act on behalf of all forms of life to try to preserve them. That’s environmentalism at the highest possible level, right? Is is not just how do we conserve what we have, but how do we expand it? How do we protect it? And that’s a really meaningful thing. That’s why these people sort of show up in droves to work at these companies and try to solve these missions. He’s starting from how do we make the future better? And that is worth that kind of mission is worth dedicating your life to. And so, you know, I I love anybody who reads this book, but I really think getting it into the hands of like 12 to 18 year olds is so massively impactful and important because the so many dominoes are still yet to be knocked over. like what you think is important will determine what how hard you work to go to a great college. It’ll determine what companies you apply to. It’ll determine what major you choose. It’ll determine the industries that you think are exciting. It’ll determine how hard you work at your job and the the level of priority you give to it. Um and a shocking amount of the most important work being done at these companies is being done by really young people like um you know the cadre of folks that you hang out with and interviews all like people in their 20s building unprecedented things like these are incredible miracles and so many people are told or implicitly or explicitly like no no you got to like go pay your dues at a old company for 40 years before you even know what you’re talking about. Um, and that’s just so obviously wrong through the lens of of history and practicality, especially in California these days. » One of the things that Elon does, which he’s uh he will basically give anyone the ability to hang themselves at his organizations. And so, you can pretty much just absorb and ask for as much responsibility as you want. » Yeah. » You know, this is another answer to your question of like how do you thrive at these companies? You get [ __ ] done. » Yeah. » Get [ __ ] done. I think » and then you ask for more on your plate like you ask to be served. » Yeah. The reward for work is more work is more work, » right? And so if you achieve things, you will be given more responsibility immediately. That’s all that anybody who’s running a company is trying to do. Find somebody who’s competent at executing things and give them more responsibility and more responsibility and more responsibility until they break. Like that’s the game. Um, and if you are trying to rise up in those companies and be as useful as possible, that’s your goal, too. It’s like I want to I want to solve the problem in front of me. I want to build more stuff. I want to get things done and I want to do that at the highest level that I possibly can for as long as I can. » Let’s talk about the algorithm. Elon didn’t have this for a very long time. I’m not sure exactly when he created it. I think it was like 2019ish after the uh 2018 Model 3 production ramp where he was just realizing all across over the course of many months » that there was a bunch of automation that didn’t even like automating processes and parts and stuff that didn’t need to exist. and he had been super all in on automation and then he started going just line by line and trying to tear out as much of as many of the machines. He would just like take a uh like an orange spray paint can and just on a machine and then they would haul it out in the parking lot and they like apparently board a hole through one of the sides of I think the Fremont factory uh to do this. But yeah, how did how did the » algorithm actually come together? like when did he figure that out and how did he kind of like rank which one made sense, you know, which part or process made sense first? » Yeah, the algorithm was the loot box for surviving Fremont. Um, you know, like he he says that he learned this by making all of the mistakes in reverse order, right? So, I I’ll explain. The algorithm is a five-step process that he installs in all of his engineers and all of his engineering companies. He’s got signs on the thing. He’ll repeat it in meetings. Um it’s his method for breaking bottlenecks, right? And so it is start by questioning the requirements. Question every requirement. Doesn’t matter how smart the person is. Um except no requirements from departments. They have to have individual human names attached to them. Um you get requirements from all over the place, right? Some come from government partners, customers, internal, whatever. So question every requirement. You want the fewest possible and highest quality requirements. Delete all the ones you can. Um the second step is to delete. Simplify like delete anything you possibly can. Delete, delete, delete. Um the most useful uristic here is that you have to overdee. Um and if you’re not adding back 10% of what you delete, you haven’t been deleting enough. But the reason to simplify is simplicity gets you both reliability and low cost. You want fewer parts, you want fewer lines of code. So complexity is recursive. Like each additional element that you have causes more complexity and causes more effort and causes more work, right? Um, so those first two steps actually in my mind carry 80% of the weight because number three is just optimize, which is sort of the typical engineering work that we think of as like making the right trade-offs and optimizing the system. The fourth is accelerate, just go faster. Uh, and the fifth is automate. And the problem is that almost everybody, Elon included, and he says this is the mistake he made at Fremont over and over and over again, is doing all five steps in reverse order. So he would automate something. His original vision for the Fremont factory is we’re going to automate the whole production line from the very beginning. It’s going to be amazing. No humans at all. Super low marginal cost. Everything will be great. Um but he tried to make it go faster. Uh then tried to optimize. So there there’s many parts that he would try to automate, then try to make the robot go faster, then try to optimize the path or that the robot was following. uh then it would turn out you could delete the product and you didn’t need the robot or the or the particular part because nobody had questioned the requirements in the first place. » Yeah. » And that is just like » figuring out one of those epiphies is a maybe a $10 million win because but it just comes from deleting something that didn’t need to exist in the first place. And once you have that experience of like addition by subtraction, like when the answer is deleting something and the upside is is 8 figures, you’re like, “Oh my god, this is mana from heaven.” Like, I’ve got to delete everything that we possibly can. Um, and it is it is shocking once you sort of start to try to run this in your own company or in your own life. It is unbelievable how frequently like how hard it is to do how different your mental pattern is from actually how that works. Um and as we talked about with the Starlink story like there’s huge benefit to doing it and doing it well. And this is I think a very generalizable not just engineering process but way to approach problems in life. » I love this quote. If conventional thinking makes your mission impossible then unconventional thinking is required. It it is an amazing quote and it summarizes Elon’s sort of intolerance of obstacles. Um, one of the stories that he ascribes to that quote is the building the tent in the Model 3 parking lot is basically like realizing that the production line that existed was not going to be able to meet their number. And so he’s like, “Fuck it. We’re building the tent and we’re going to, you know, buy some more tools, buy some more robots, hire some more people, and we’re going to build a second production line in the parking lot.” And I think I’m sure they ended up getting like tickets and permit fees and all kinds of stuff for that, but he’s like, “We had to we had to make the number or Tesla would be dead.” Um, unconventional thinking. Like this is over and over again like the intolerance of obstacles, the questioning of requirements is I think some of the source of his his magic and mystique. Um, another one is like, you know, oh, it’s going to take a year and a half to get this permit. is like, “All right, grabs somebody, sends them to the permit office, and says, “Do not come back until we have this permit.” Like, I refuse to believe it takes 18 months to get this permit. And time after time, it’s like, “Oh, it comes back 3 days later with a permit.” Unconventional thinking. Um, that accelerates your timeline and saves you potentially like a year and a half of burn and potential bottleneck. like that kind of unconventional thinking, that kind of high agency um is just so I think to people who seek to be effective in the world, those stories are so encouraging and inspiring and refreshing and just like oh thank god like somebody who’s just tears down all the walls, all the false perceptions, all of the croft and just like cuts straight to it and gets things done. Something I think a lot about is how Elon might play the game if he was born at a different point in time. I think you’ve referenced him as similar to Napoleon and a bunch of these other characters. I would think of him in a similar vein, but I kind of wonder how, you know, the the Napoleon of today wouldn’t necessarily go kill a bunch of people. Same thing with like Cornelius Vanderbelt. He wouldn’t necessarily hire some assassin to go kill someone and take back his ships. And I wonder how Elon might have played the game if he was born like 300 years ago. I think there are different uh archetypes of great founders, you know, like Toby Luki is a very like engineeringminded founder. Um Elon is more of a conqueror like I think you know that extremely willful. Um and you know Napoleon I I think like Naval referenced Napoleon uh in his forward too like Napoleon’s ability to be his instant bias to action and like strategic brilliance um I think are both traits I see mirrored in Elon and I know Elon studied a lot of military history. Um he also talks about in the book he talks about the tendency people have to use their contemporary morals to judge the historical actions of others which who existed in a like completely different u moral environment and so like you know it’s not that long ago the fish that ate the whale like Sam Murray overthrew the Honduran government like hired assassins like that you know in the Robert Baron era the industrialist era like you know there were violent protests and people were like putting down picket lines with mercenaries like um the the tools of the trade are are different at different eras. I expect that Elon is the kind of person who would win in the domain that he chose to play in. » Do you want to talk about empathy at the like individual level versus empathy at the mission level? » It’s it’s sort of one of Elon’s maxims that empathy is not an asset. Um and I think a lot of leaders overindex on empathy for the individual rather than empathy for the team or for the mission. Um, and this is what a lot of people I think criticize Jobs for. They criticize Elon for is like, “Oh, he he should have given that person another chance. He shouldn’t have fired them so quickly.” Um, and the reality is that 99.9% of firings probably heir on the side of caution, not on the side of well, you should have given them another chance. You should have um you fired them too soon. And » we as people just always want we feel like we deserve another chance. And so we put ourselves Yeah. uh we we put ourselves in the shoes of someone that we feel u is on the receiving end of an injustice and we feel like Elon perpetrated an injustice to an individual maybe by not giving them you know a second or third chance. Um but in a situation where there’s billions of dollars of capital and equipment and the whole rest of the team is performing. Um it is empathy for the mission and empathy for the team to make sure you’ve got the right person in that seat and get rid of anybody who’s not, you know, an A player or an A+ player. says this is like the special forces like excellence is the passing grade and that’s why these companies are some of the most effective places on earth. Um you know Mark Andre has talked about what makes Elon effective and he says like going to SpaceX is like being dropped into a shocking zone of competence like the bar is just so high for everybody there and you know everybody knows the quote about a players want to work with A players. um that becomes self-reinforcing and that culture becomes self-perpetuating and it does filter for people that want to be really excellent, push to be even more excellent and work as hard as they possibly can. » What role does fear play and like being someone that others fear? » It’s a good question. I uh I know the Makaveli quote, right, about like you can be feared or loved and you know fear is more reliable or something like that. Um, I think there is probably a mythos around Elon and like an Elon meeting and the fear of being, you know, fired on the spot, um, because you weren’t prepared is is a real thing. Um, you know, I think there’s you can be motivated by carrot and stick and the combination is the most effective. Um, you know, you’re working on a grand beautiful mission. You’re being pushed. um you’re being held to a high bar and you can get the most out of yourself when you’ve got something you’re like I really I know I want to clear that bar and I know the stakes for not clearing that bar are high. I think Elon would say and has said like I try to give people I give people hardcore feedback right um but he also says I try to do it about the the action not the person which is a very important distinction um and he’s been on the receiving end of that you know himself like he seeks negative feedback he’s says that’s a very important part to close the iteration loop um you know and there’s stories from the Isaxson book that I’m sure you know we’ve both read many times it’s like you know you failed quite badly in this meeting you should know all your parts you know in order by their idiot index » and if you don’t you’re gone. » If you don’t, you’re gone. I expect improvement or your resignation will be accepted. I’ll see you tomorrow. Like this is what I expect and this is when I expect it. Let’s see it. And you know the person that that story is about showed up and crossed the bar tomorrow and was like I am a different and better person now as a result of being held to that and I understand things and do things that I didn’t before. » I don’t know that I’ve seen this other organizations but there is this constant idea of churn. As soon as you join an Elon company, you’re just running down a clock. And who knows exactly how long that clock is. Like I was listening to the biography uh from Walter Isacson and a lot of people inside of the organizations that Elon runs don’t even necessarily like that he’s fired a lot of the people that he’s fired and yet he keeps on doing it. And so I almost feel like it’s having some result that they don’t necessarily understand. Like it forces » does force some fear. It forces like some urgency. If you don’t have your [ __ ] together, you might be exited at any given moment. What do you think the benefits are? » Churn is a frame that’s kind of used usually for like customers quitting a product. And so it’s it’s sort of an inherently negative frame. Um, and I’m not sure that that’s totally the right frame, right? Um, people are the right people for different companies at different times. And one of the things Elon’s point out is like you generally turn a whole company over at each order of magnitude or 80% or something like that. And companies like Tesla and SpaceX are growing so quickly that in particular in leadership positions the the person to take the company from a 100 million to a billion is a different you know VP than the person who’s going to take the company from a billion to 10 billion. And a two-year tenure looks short at a typical company but a two-year tenure where you covered an order of magnitude is a great tour of duty. Um especially if it’s one where your lifestyle is completely compromised as the employee, right? Where you’re like, you know, I » Yeah. or working 24/7 or or living on Quatch or, you know, if your family’s in LA and you’re working at Starbase, like um that’s not a situation that people necessarily want to be in for 10 or 15 years. And there’s not an inherent moral good to working at one place for 20 years. I feel like that’s a pretty kind of outdated idea. Um, but I think I think you know fresh new talent, the ability to rise quickly, the ability to prove yourself quickly, um, and understanding that you have a relatively short period of underperformance before you’d be pushed out of an organization is a way to keep the bar really high. » On the idea of ruthlessness and being willing to be disliked, I think Elon doesn’t actually like people not liking him even though he is willing to be disliked. If you look at the people that he surrounds himself with, they typically don’t voice at least publicly uh any feelings that they have that are not positive. And if they do, then they are no longer in his inner circle very quickly. Let’s talk about like his willingness to kind of be disliked and and kind of be ruthless. » It is interesting that at the same time he uh sort of says empathy is not an asset and he has the willingness to be disliked, which I think is true. Like I think you could not have done what he’s done if you didn’t have the ability to put sort of the mission ahead of how someone feels about you. Like he’s had to run through wall after wall. he’s um had to do so many difficult things and have so many difficult conversations over the course of what he’s done that I think it’s I think it is true that he has at least in many ways stealed himself to being disliked preventing him from getting something done that needs to get done. So I that I take that as the frame for kind of the empathy is not an asset. Like the willingness to be disliked is an advantage in particular if you’re trying to do something innovative in particular if you’re trying to if you’re taking on an industry. Of course that industry is going to attack you in any way that it possibly can. So one of the other things that he’s doing at the same time though is also sort of uh running a pretty public campaign about like hey I’m not a bad billionaire. Like I sold all my stuff. I don’t want these like attack vectors of being overly materialistic. I want it to be clear that I’m not sitting on billions of dollars in a bank account not doing anything. Like he has a high net worth that comes from stock which comes from controlling the companies that he’s in control of that he started or funded. Um, so he he does really I think it matters to him uh to not be unfairly characterized. Like » yeah, if you have a different opinion about him than he may have, that’s okay. But he just he wants to make sure that basically you’re not like unfairly targeting him for like having a car where » Yeah. Which is person’s like, you know, way to go through life anyway. like I I think um I think he he’s just become a lightning rod for you know contro he’s one of the most famous people alive and um in some ways courted that in some ways it’s just a natural byproduct of building some of the things he’s building and having led the organizations that he’s leading um but it is a very tricky thing um and I think he has a deep sense of like you know right and wrong and injustice and I imagine you know in particular like with his dad right? His dad is a relatively well known to be a a liar and a manipulator and has abused you know him and his family in the past and like so people publicly saying like oh you just you know you inherited your wealth because you know the dad claimed to be sort of providing these um these benefits like that has to really hit the heart like a a very soft spot. Um, it has to be enraging like I, you know, how can it be anything else? Like this person who tormented you claiming credit for something that you truly did yourself and then other people who are your enemies for their own, you know, personal reasons then attack you like based on this false claim. Like of course anybody would would be like that’s not the kind of like, oh yeah, just steal yourself to that kind of dislike. Of course that would bother you. Um, I can’t imagine handling that kind of pressure, right? like how many people want a 100 million enemies um and are willing to stand on their principles to take that um and still show up and keep going over and over again like it is a very I do think he is very principled and he’s willing to endure being disliked to stand by those principles and I think that’s a like interesting and admirable thing you know the Bill Gates example um of like Bill Gates claims to be uh » environmentally friendly, you know, let’s save the environment and yet he’s like shorting Tesla. » Exactly. Yeah. Um like that is not those are not actions that Elon would take like um and there’s many things that he could be rightly criticized for doing and he he does seek negative or seek critical feedback on actions. Um but I do think you know to your point expects a level of sort of um solidarity and loyalty in particular from the people who are like closest to him on a public lane when he has so many people actively trying to undermine him which which then undermines the success of the missions, right? there is an a strong extent to which like additional capital, additional employees, all of these things come from public perception of him and his work and the importance of the missions. And you know, it’s not helpful to have people throwing Molotov cocktails at Tesla dealerships. That does not help Tesla. That does not help achieve the mission of solving climate change. Um, and so I think like there’s an extent to which being dis being liked or disliked or at least understood to be on a mission and a principled person on a mission is an important part of getting these things done. » There’s one aspect which is setting the vision, setting the mission, making sure that everyone’s aligned towards it. » There’s another thing about creating enemies and chaos and using, you know, the little finger line, chaos is a ladder. Um, I really think that Elon has like fully embraced that philosophy of basically create chaos and as you know things are happening all over the place. Just be better at playing the game in real time. If lots of [ __ ] is happening and there’s too many signals, other people’s brains will get fried. Whereas he that’s where he’s able to lock in. » Yeah. I feel like when he sees the game board clearly from a really zoomed out view um what looks like chaos to people sort of with a narrow view, he can still navigate really cleanly through um cuz he’s moving really fast and he understands like the ultimate goal. And I think if you have those two things like the short-term stuff that looks like chaos is just kind of noise. » Well, I also think that the fact that he is able to play in that way and he knows that the easiest way to play is where other people are kind of on, you know, if ever if the ground is changing. Yeah. » And so it seems like whenever there is like a peacetime moment, he will just inject uncertainty, chaos, action until the ground is moving again. » Well, and his his speed causes that chaos, right? like you know when he launches a new program or a new company like his sudden push towards data centers in space really changes the the board of who’s investing what capital into what different » AI even on like the data centers in space thing he was asked on a podcast how he came up with that idea and he said it just went viral on Twitter a few months ago » like this but then you look at the valuation of SpaceX from when he comes up with this idea to today and it’s like 4x higher and I’m like this you know the first 20 years of SpaceX are just 1/4th of an idea that he has in his mind and that he’s going to go, you know, raise 100 billion or something in an IPO for. » It’s also, it’s an interesting like uh Starlink part two where like Starlink was actually an outcome of like, hey, we have all this volume. Yeah, we have launch capacity because we’ve created it. Um, and rather than wait for the market to figure out what to put in it, we’ll just start putting up our own stuff. And I I think data centers in space is basically the same thing um for the Starship program. Max Olson’s essay talks about this like the integration of volume and iteration speed um being integral to kind of the SpaceX culture which is just um is a great question and a great essay. » Mars is obviously the long-term mission for SpaceX and making life multilanetary. » Yeah. » But it’s very interesting to me to see Elon pivot to we’re going to make a moon base in, you know, the short term next few years and then we will start working on Mars in like 8 to 10 or longer. Do you think that Mars was basically a useful thing to pursue until they finally got the capac like ability to actually launch things and then they’re like, “All right, let’s just go target the thing that, you know, is an obvious first step.” I I’m wondering if, you know, Mars was just the useful mission to get people here and now the realistic thing is like the moon and he’s just going after the realistic thing or the fast thing. » I think it I think you sort of you see it with increasing resolution as you get closer to it. And so I think Mars is, you know, as you said, is still the north star, still the goal, still the ultimate outcome. But I think there was, it probably became more clear that there is a near-term like high ROI project to do that is also on the same stretch towards Mars. And I think there’s it’s going to actually going to be a really exciting it’s partly probably the AI breakthrough partly um like solar technology and capacity is like those things are all coming together to make it another scurve that will make Mars incrementally easier um rather than just like pouring cash from you know Falcon 9 and and Starship into going to Mars. It is probably just each incremental leap uh that you see with a little more clarity once you get closer to it. » There’s a moment in the Walter Isacson biography where I think around 2020 Tesla you know the stock was just absolutely ripping and at two separate moments he tweeted like the the stock is too high and of course the market reaction was not pleasant about that. Um, ironically, the first time it just kept on going higher and he was like, I guess I don’t. And then he went on a few podcasts and he was like, I don’t know. I said it was too high. But then in the Walter Isis biography, he recounts the story of basically Elon one night just sat alone in a room and just thought the entire night and then in the morning came out with the conclusion that the only way like this new the only new business line that would justify the valuation of Tesla just working backwards is uh full self-driving and like this massive robo taxi fleet and then they just kind of went all in on that. I wonder how many times Elon has kind of basically taken some massive thing and they just backfilled how do we actually justify the thing that exists. » Yeah. Like rabbits out of hats over and over again. Um this is a little bit back to like the unreasonleness is part of the magic and like the childishness of like yeah no let’s do the crazy thing. Let’s go for it. Um, and you know, being wrong about whether it comes in three years or five years is like less important than whether it comes at all. And you know, the sort of goal gradient hypothesis, right, of like we’re sprinting to a finish line and we sprint harder the closer it is. And I don’t think it’s intentional or manipulative, but I do think there’s a real thing to like feeling like it’s two years away is like, oh, we’re on a sprint and we’re on a sprint and we and we sprint those two years and we cover a lot of ground and we find out there’s maybe there’s 18 more months of work and maybe there’s another year. Um but like that’s how something like autonomy you know we’ve made so much progress in autonomy since then but that was a big part of the vision even from the earliest days of Tesla I think um or close to it was like there’s two big changes coming to automobiles in this era which is electrification and autonomy um and doing both at a time when the industry itself was not working on it with particular diligence um you know set up these huge expectations for Tesla for sure. » I’ve noticed that with almost every great entrepreneur, they will become more ambitious over time as things start to work. And it’s really there’s almost like an S-curve. You can think of people’s ambition as like they will rapidly run up the S-curve of how ambitious they actually are. And then the best entrepreneurs in the world, you’ll just notice that like the new uh » the S-curve is almost shrouded in fog. You don’t actually know where the where the top out is. And then as you go up, you can see a little further and see a little further and they just become more and more ambitious. With Elon, it seems like there have been different levels of ambition over time. And if you really think about it, he’s just basically the most ambitious person probably maybe ever, starting new civilizations on other planets, just keeps on getting bigger, keeps on resetting the bar. you know, he just announced the terra fab or something and he’s like, “Now we’re going to basically use the entire moon just to launch AI satellites.” » Kind of nuts. Um, just using entire planets that people just don’t think this way. How do you think his brain is different? » I don’t know if it’s different. Like what does everybody want? Two to three times what they have now. Like when you survey people like what’s your net worth goals? Like I don’t know 3x whatever I have. Um, you hear people go to like all these seminars like I’m at I’m at $3 million and I want to be at 10. And Elon Elon says like I definitely emboldened over time and um I think it’s one of Senro’s maxims like u you know appetite comes with eating and you know I agree with the trend right like every entrepreneur who succeeds like we all strive for more. You want to build you know reach the next triple the next order of magnitude. Elon’s just covered more ground than anybody else and he has there’s no limit to his imagination. And so like I think his imaginativeness I think his unbelievable track record so far like he’s he keeps taking chances and they keep working out. Um it’s like what are you going to do but keep taking chances and keep doubling down and he’s able to tackle things. He he has already said I didn’t ever think I would get a chance to work on the things I’m already working on let alone what’s coming next. But these do I mean the leverage sort of compounds on itself and when you have like you know these billions of dollars these incredible engineers and the momentum like not going to let up just going to what’s next? What’s next? What’s possible? How do we keep going? Like I feel like we’re so lucky to live in the era where we get to like be a part of this happening. » Most companies that start out the gate with a huge amount of cash behind them, hundreds of millions or billions of dollars, almost universally don’t end well. Yeah. uh they don’t they don’t seem to actually produce value and like create something useful. But Elon has enough of a track record of I think creating useful things that he’s got like a unique position where he’s able to throw just insane amounts of capital behind a new idea in a very short time frame with the right mental models and then actually have success. » Yeah. One of the things I think is underrated about him is actually how frugal he is, how like the the common thread of his companies is actually for as technological and and breakthrough and innovative as they are, they’re not over capitalized. You know, they they are capital efficient and they are driving costs down all the time. Um, you know, the north star of Tesla is as many Teslas on the road as you can and increasing safety through autonomous driving and SpaceX’s northstar is like minimize cost of mass to orbit. um you have to run an entirely frugal organization in the same way that like Amazon does everything they can to to lower prices and Walmart does everything they can to lower prices. That’s the culture of these organizations. And so even though they did start with, you know, tens of millions of it was also his money and he was paying close attention to where it went and he was driving this like sort of frugal culture of innovation um and through the product itself. It’s the goal of these organizations to be relatively cheap. Like the equity value of them is so massive because of the growth rate that they’re on and how singular the capabilities of the companies are which comes from the engineering ability and vertical integration that they have. Uh which I think is so interesting. You you reminded me earlier of um the the vector sum model for building a team which I think is another like how does he outperform? What are his tools? What are his his mindset? I love the idea of there may be a whole bunch of really smart people but if they’re not if someone is super smart but not aligned then it can actually be a complete distraction and negative like negative impact on the overall organization. » Exactly. So so you as a founder like you start a company you are one arrow and maybe like the the size of the arrow is how smart you are and how long the arrow is how fast you’re moving and as you add people to your company you’re adding additional arrows and maybe they’re big or small arrows maybe they’re long or short. Um, I’m not using the like mathematical language here, but it’s just easier to visualize what’s going on. And as you add people, you know, you could have all different kinds of alignment and you could all different kinds of arrows, but the more aligned they are, the bigger they are, and the longer they are, that is the vector sum of the organization. And as you add them all up into like a big arrow, that’s how much ground you’re going to cover. So you want the smartest people, you want them working hard, and you want them all aligned and working towards the same thing. And one of the things that he uses to achieve this is like one metric. He says video games without a score are boring. So as you’re like building a team, you want one metric that every decision should be run across, run against. So at different eras, it’s different or different teams is different numbers. Obviously like for autonomous driving, it was how many miles are driven on average between uh a human intervention. How many times do people feel they need to grab the wheel or step on the brakes to change what the autonomous software is doing? And so every meeting that he has with that team, the first slide is what is that number and how has it changed? What is that number and how has it changed? And so every decision that they’re making, every design decision, every incremental hire, every effort, every dollar they spend is like does it move that number that Elon wants us to move? And when you sequence those changes out, that’s how you get to these like, you know, oh my god, people are driving across the country now without any intervention. It’s, you know, hundreds or thousands of miles. That’s actually an interesting thing to think about as well, being really really thoughtful about which metrics you go after and what is the actual goal. I think not enough people spend enough time figuring out what is the objective like the real objective that I am going after. And if you don’t have that, you can have the highest agency, best people in the world, super smart, super energetic, but if they’re like all working in these different directions, like this is the whole idea of you just hire a bunch of smart people and let them cook. I don’t think that actually works um in in in a real way. And so I I you know thinking about how Elon figures out which you know he’s going to tackle some new objective, some new thing, which metric to go after and like how to decide which one that is. » Yeah. The the maybe the most famous one in retrospect is probably going to be, you know, cost of » launch to orbit. » Cost of mass to orbit. Yeah. Like dollars per kilogram to orbit. Um and and that’s you know that’s been consistent across Falcon 1, Falcon 9, Starship like each program is designed and each design decision is made like how do we minimize the cost or maximize the payload um to orbit for cost. Yeah. Um and then then it becomes a volume, right? So you’ve got you can optimize that on an individual ship level. You can also optimize that on a system level like how many of these things can we build? How quickly can we ship it? Where does the booster land? Where does the you know the ship land? like how do we build a launch system that drives it all through as quickly as possible. Um, and so that’s a number that’s been dominating decision-making at SpaceX for a really long time. And it does go back to that cost, like the efficiency, the efficacy. Um, with the Northstar being like getting to Mars, building a civilization on Mars. And in the meantime, you know, it’s achieved Starlink. In the meantime, it’s dropped launch cost two orders of magnitude and also unlocked this opportunity for data centers in space and many, many other things that are happening in the space economy that, you know, are just going to continue, right? But there’s also the Tesla Model 3 scale up was 15,000 cars a week or we’re dead, I think was the number. » It was uh 5,000 a week. » 5,000 a week. Okay. Um yeah, 5,000 cars a week or we’re dead. And so that’s on TVs all over the place. Like that is he must have said that a thousand times a day. Everybody on the team knew it. Um that’s the bar we have to clear. And that was the result of like many many calculations of you know what’s our capital what’s our burn how many sales have we made like what’s our » turn again like if conventional thinking won’t fulfill the mission then you know use unconventional thinking at one point he figures out that the max capacity at the Fremont factory is going to be like 30,000 or 3,500 a week and suddenly he goes okay what’s the next thing and they end up setting up the entire tent 5000 » and I I do I do find it very interesting that he immediately was like yes we will get fined this is a thing that will happen doesn’t matter What matters is just getting making sure that we achieve the objective. » Yeah, there’s just a speeding ticket, you know, but survival of Tesla was on the line. » I I love Jeff Bezos’s line where he says, “Your margin is my opportunity.” How does Elon operate with that philosophy? » Like he’s got a incisiveness about inefficiency that he sees in other industries. Um, and this goes back to sort of at what level is your empathy? Like he comes at a product from a first principles way and says this is how effective or how cheap or how efficient a product could be and then looks at all the different ways that an industry uh maybe is acting inefficiently. Um and » same thing with the idiot index. » Yeah, the idiot index almost on an industry scale, right? And so looking at aerospace, it’s like you know these primes but just basically act like an igopoly who have this poor incentive system. The government’s their main customer. or they’ve got subcontractors on subcontractors on subcontractors on subcontractors and he looks at that and says, “Yeah, we can do we can make an order of magnitude improvement.” Like there’s a lot of people making profit for not adding a lot of value and we can take all of that. And you know, his businesses don’t tend to act to protect margin very often. Um I think he puts himself and his organizations in a place where continuing to innovate is always the main incentive. like, you know, SpaceX as an example, they could just sit on and cash flow Falcon 9 for 20 years. Um, and it would be one of the best businesses of all time, but they were immediately plowing money back into Starship to kind of ride that next Scurve up. » It’s very interesting to me that if you think about the most extreme version of capitalism, it honestly kind of turns into a nonprofit. like the very best businesses in the world are like a Costco where in order to achieve the scale that they have they’re just giving away they they are they’re minimizing I think they have a max margin of like 15% on any given product and if you look across the entire organization where does the profit actually come from it’s basically just their card memberships so they make like 120 bucks per per person per year and outside of that they’re effectively just running at a loss » yeah Bezos has a good like binary here which Like there’s two kinds of companies. Some exist to charge more and some exist to charge less. And we will be the latter. That’s like Amazon, Walmart, uh Tesla, like that is how those companies operate. Of course, you know, Louis Vuitton is the opposite, right? Luxury brands are always like how do we maximize margin and perceived value and like but I would argue the customer value the consumer surplus created by companies that pursue a lowc cost strategy are almost always higher in the long run and they become the biggest companies and the ones that generate the most equity value because they have the most customers and they do the most good uh in the world on the way. When I was interviewing Peter Beck recently from Rocket Lab, he said something that I kind of intuitively thought might be the case, which is if you don’t control your ability to launch, then you’re effectively operating at the whims of some other third party and like the good graces and they could pull the plug at any given moment. And he said the only space companies that will matter in 10 years are the ones that have the ability to launch rockets. meaning like they own their own launch pads and space » and like their ability to launch. And I thought that was very interesting. I also know there’s a whole bunch of startups that are like we’re going to launch a whole bunch of satellites but if Elon or Peter Beck does decide sorry I got to you know I have my own capacity and we can we you know we we we are scaling launch at this insane rate but our ability to use that launch is growing at an even faster rate » then suddenly there’s really no third party providers. How do you think about that? How do you think that’ll play out? there’s an auction at the toll booth to get off the planet and whoever can afford to pay the most like will get off the planet first. Um, but to their credit, SpaceX is building as much capacity as they can. Um, I think because one, they know how to use it and two, they know volume drives cost down and cost keeps them ahead. They have a large cost advantage. And if they can do a really high volume of starships, like nobody else will even be able to touch them. That’s also how they achieve the the mission, right? If the mission is Mars, the mission is not near-term cash flow, maximize profits. If the mission is Mars, you need a massive volume of ships, and volume comes with cost. And so, yes, you’ll come up with your own use cases to fill your cargo, but you also want all the customers you get because the customers are helping to fund, you know, and fund additional production, but also fill the volume that drives incremental cost down. There’s an idea that Elon has that I don’t think other entrepreneurs or most entrepreneurs share which is this idea of thinking in limits. And so instead of saying you know we’re going to make this robot and how do we make one robot he’ll he’ll first kind of say if we were going to make like a billion of these robots what would the as you know how how would the curve of cost basically asmtote to zero right uh and what is the raw material cost and and making that what do you think the importance of thinking limits is » I think it’s incredibly valuable tool um you know he does it at a really extreme level like the the kind of entry level to this is Charlie Munger’s idea that like great brands minimize or maximize a few variables. And so if you just start there and sort of continue it um you know the the thinking and limits, the first principles thinking, the idiot index are all sort of linked. They’re different lenses on the same uh kind of idea. But the thinking in limits really helps you illustrate helps you understand what the theoretically maximum perfect product is or perfect solution might be. And then everything between where you are and that theoretically perfect thing becomes one of these sort of obstacles to tear down or not tolerate or uh question until it dissolves. And it’s one of the things that I think makes them like a paradigm shifting set of organizations, right? It changes from incremental improvements. How do we improve 10% to how do we improve 10x? How do we get closer to this theoretically perfect thing? Um there’s just a very imagination expanding thing and Elon has a trick for this which is like when you once you conceive of that theoretically perfect um just start asking what would it take like not not why can’t you but what would it take in order to accomplish it and sometimes the answers to that have been you know oh we can’t do this radically simplified rocket engine design because this material you know doesn’t have the tensil strength to hold up at this weight. Well what would it take? It would take a material with different properties. Well, is it physically possible to create that new material, that new alloy? Um, well, in theory, I guess, why not? Okay. Is anybody on Earth working on it? Has anybody made progress on it? Are there any papers written about it? Like, what would it take to build that new material that makes this new design that is a massive step function improvement better? And if you look at the, you know, the the meme of the three Raptor engines, like there’s probably 10,000 or a 100,000 of those decisions that drive simplicity and optimization and new materials and new designs um along that path that increase the cost and effectiveness of that, you know, that engine that’s going to be the thing that takes us hopefully all over the solar system. I forgot which CEO tweeted this, but someone posted a picture of the Raptor 3 engine and then the CEO commented like, “Oh, that is beautiful, but like it didn’t show, you know, it’s they didn’t really show the full thing.” And then Elon’s like, “Actually, here’s a video of it firing.” » This is in fact the full engine. » Yeah. Um, if something is easily measurable, Elon seems to try to expand the vision and expand the mission and create new things until it’s almost impossible. It’s like this option like option value. If you think about the car business, right? First, it’s we sell cars and then that becomes easily measurable, but having access to more capital and cheaper capital and having a higher share of value may be useful. um and other things like having uh talent that wants to come join you because your vision is bigger. Suddenly he creates full self-driving as a narrative. And so suddenly you can’t really price it as a you know it’s not actually a car company as a technology company. Um it’s like a full self-driving company. And then at some point even that doesn’t become you know people aren’t going to buy cars. They’re just going to rent them for an hour or 30 minutes or something as they’re driving them. But then suddenly it’s like actually Tesla’s not even a car company. We’re going to build robots and we’re going to be like the biggest robot producer in the world. we’re going to make a billion robots a year. Again, you just can’t really measure it. It’s, you know, fairy dust almost. And, you know, but he’s got this track record to prove that he can make the fairy dust real and then eventually he’s just like Tesla’s an AI company actually. And it’s the same thing with SpaceX. » Yeah. And along the way become, you know, one of the biggest grid battery providers and Oh, yeah. The energy business integrate backwards into, you know, refining their own lithium because that was the bottleneck for battery production. And, um, yeah, it’s a really What role does that like resetting what people’s expectations are to just increase the size and scope so that it’s impossible to pin down here is the value, here’s how you should value it. » Yeah. Well, most companies seem to have one innovation, right? They ride one S-curve. Um Eugene Wei has a great story about Amazon sort of mapping those S-curves and stacking them. And I think Tesla, Elon has referred to as a series of startups. um Tesla and SpaceX both are this unprecedented stack of S-curves and so there’s always some where it’s like you know that happened a few years ago and now you know the technology level has plateaued and it’s in a sort of a cash flowing state and that’s where you know Falcon 1, Falcon 9 are now. Um Starship is sort of on its way up that it’s not an operating cash flowing thing. Um but we’re you know rounding the corner into but Starlink is really in that like all right we have a good sense of what that business is. We have the numbers it’s a good business. We don’t know yet quite what data centers in space are going to be. That’s a little handwavy. But that’s kind of always how a new S-curve feels. And it’s not always clear that the math will math or exactly how it’ll work out in reality. But there’s also pretty good reason to believe, you know, given the series of S- curves that have happened before that it’ll work out. I I feel like we always have this funny dysmorphia of the present with regards to Elon where like we look at the things that were impossible that were achieved in the past that and we’re like, “Oh my god, he he’s so good at this. I can’t believe, you know, it’s so fantastic that Starlink worked out. What a genius. And then we look at, to your point, the next S-curve, the pixie dust, the handwave, and say like, but that’ll never work. We’ll never have a mass driver on the moon. That’s crazy. We’ll never have, you know, data centers in space. That doesn’t work. All the experts say that doesn’t work. And even after 25 years of him achieving the impossible, in this moment, we still feel qualified to sort of judge and dismiss, you know, what he’s saying is going to happen next. And of course, he’s not always right in the in the micro. Um, but as he points out, he’s like, “I’ve lost many battles, but I’ve never lost a war.” And I’m generally right on the outcome and wrong on the timeline. » The only two things that I really remember him saying, “This is what the future is going to be,” and then they didn’t really pan out, was Hyperloop » and the full battery pack swapping, where you would just drive up, the thing would take off your old battery pack, give you a full new one, and you just drive away. Those are the only two technologies that just never really worked. » And the bad the battery pack, I think you could totally imagine like that could absolutely work, but it just there was different design trade-offs that made it impractical. Um I think there’s a Chinese automaker that that might » Yeah, they they do. Um yeah, it’s also interesting to think about his I think Elon’s real only competition in most of his industries is China. » Yeah. Which most people in America are just not aware of where the Tesla where the Chinese automakers are. There’s this knife fight analogy where the best CEOs basically just wake up, grab the knife, and go start stabbing. Um, » I got that from Brett Brent Beore. Yeah. Operating a business like living in a knife fight, you know? » Yeah. » Yeah. I think I think China is playing the game on hard mode, and so you’re basically just in a knife fight with a bunch of other like incredible assassins. » Yeah. Yeah. I’m sure that’s a very difficult um a very difficult environment, but it’s also really cool. like the the innovation that is coming out of China is cool and inspiring and frankly like we should take a close look at it because there’s it again is showing us kind of where we could or should be um but haven’t been yet. when [ __ ] goes horribly wrong, Elon kind of internalizes it and then forces I think he almost drive even tries to find the humor in things and then once he’s there was this uh famous one where I think the third ship blew up uh before the fourth launch where it actually succeeded and went to orbit and at first he was incredibly like dismayed but they went out there just saw the wreckage saw what didn’t work figured it out and then I think like that night or even like the next night he was laughing about it and just moved on and like let’s go get to the next thing. How does he internalize pain and and deal with setbacks uh in an unusual way? » Yeah, it’s funny. I think there’s a couple different potential modes there. I think um you know he has this like hardcore mode where he’s like you know wrote an email to that company was like come hell or high water like we will make this company work. I’ll spend every dollar I have like I will not I will not quit. You’ll have to kill me. Like um we’ll just keep keep going. I’d never give up. I’d have to be dead or incapacitated, right? Like there’s that hardcore mode and then as you point out is like that sense of humor and lightness that comes from kind of like playing life like a game and being like it’s all a sim like we’re just going to do the best we can to play this game as hard as we can like and get as far as we can and take the next chance and like yolo, right? like there’s a light-heartedness in that that helps when you’re going after these incredibly big challenges with such high stakes. And you know, I think we talk a lot about the financial risks he took, but we don’t people underestimate, I think, the reputational risk, like the ability to charge into something with a high likelihood of failure and proving that, you know, all your haters were right when they said like, “Oh, an internet guy is going to start a rocket company. You’re going to fail. You’re going to lose all your money.” like um there was high odds that he went down as a cautionary tale of like hubris of you know burning a fortune um at least in the medium term but also you know knowing how willful and determined he is maybe he would have just kept trying to start versions of these companies until they were eventually successful um you know even if he did multiply by zero at some point along the line I’m sure he would have gotten up and kept trying um and for some people it’s probably even harder to risk reputation or public public embarrassment than it is to risk, you know, capital and effort on an outcome. » What do you think the biggest evolution has been over the last uh 30 years of his operating philosophy now that he has more and more resources and more and more social credibility and track record to back up his claims? » I think there’s an inflection point probably past which Tesla and SpaceX both became like undeniable. um which is probably like the combination of Model 3 on the Tesla side and the Falcon 9 success um and and NASA contract on the SpaceX side that I at that point and they were around the same time. I think Tesla was still kind of a little probably a little um uncertain until like autonomy came in, but at that point it was like, “Oh, this is like a tenth of a percent chance. This guy walked through fire for years and years and years.” Um the the the bit kind of flipped on his public perception and that was when that was his like, “Oh, we’re going to base Tony Stark on Elon Musk like Iron Man era.” Um, and he was a hero to the the tech community and the rocket nerds and the space people and everything, which is incredible, but it was before the sort of controversial era of of, you know, getting involved in politics or being overly grandiose about um, some of what was coming in the future. And so I think that inflection point gave him unbelievable amounts of like capital and credibility that led to him doing stuff, you know, like the Twitter X takeover and um Doge and stuff where he became like an actual household name. » Final thing to end it on is just the idea of effectiveness and what makes a super effective individual. I like the thought experiment of um if you had perfect information and perfect energy like what could you achieve? Um and you know through a financial lens just to use it as an example like if you knew exactly which stock was going to go up the most today and tomorrow and the day after in the market you could put all your money in whatever the best performing stock was every day and stack it up and it would not take you long to become a billionaire, right? Um, and I use that just to say like when you’re working on the right thing at the right time, uh, and it’s massively effective, you can you multiply those things together and you achieve orders of magnitude different outcomes. And those tools in that mindset are available to anybody, right? These are not superhuman traits. You don’t have to be a genius to adopt these particular things. Um, and hard work is actually the least important thing of the formula. It’s the right work done quickly with maximum effectiveness. Um, that’s sort of the equation of being an effective person. And there’s there’s a million billion reasons why people are not working on the right thing, not working on it immediately, and not working on it with maximum effectiveness. Um, but all of those reasons, you don’t have to solve all those reasons to just invert it and start using that mindset. like run this constant triage of what’s the most important thing I could be doing right now, what’s the highest leverage action I could possibly take, and how hard can I jump on that lever?